AFCA to expel Dixon Advisory

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The Australian Financial Complaints Authority (AFCA) is set to kick out Dixon Advisory & Superannuation Services (DASS) as a member over the next few weeks.

AFCA announced on May 28 that the administrator of DASS has 21 days to reply to the proposal.

AFCA expects the expulsion to take effect on and from June 30, 2024 pending its board's consideration of any submissions.

AFCA to expel Dixon Advisory

When ASIC cancelled DASS's licence in 2023, it was required to be an AFCA member until at least April 8, 2024. This was also the last chance for victims to register a complaint with AFCA.

"The AFCA board will consider any submissions made by Dixon Advisory at its next board meeting on June 20, 2024, before making its final decision," AFCA said.

"AFCA can only accept complaints about firms that are current members of the AFCA scheme. Once an AFCA member is expelled, AFCA cannot accept any new complaints against that former member, however the expulsion of a member does not prevent AFCA from considering and finalising complaints received prior to the member being expelled."

AFCA received a total of 2492 complaints related to DASS at the end of April.

The Financial Advice Association Australia (FAAA) chief executive Sarah Abood said the membership has been extended twice despite the fact the company went into administration in January 2022.

"This meant that complaints by former clients could continue to be made and would continue to be eligible for compensation from the Compensation Scheme of Last Resort (CSLR), considerably increasing the potential cost of the scheme to financial advisers well beyond the actuarial estimates," she said.

"Ending the membership of Dixons as proposed, effective on June 30, 2024, represents an appropriate and fair outcome for consumers, providing them with ample time to lodge a claim, as well as recognising that the profession is funding the compensation."

Also commenting, on LinkedIn FAAA chair David Sharpe wrote: "Let's be clear though - this isn't success with CSLR. It simply makes a bad situation arising from the legislation less bad."

"Ultimate success lies with Minister Jones to fix the mess of the CSLR that forces small business and individual advisers to have to pay for the actions of a subsidiary of a currently listed corporation."

This article first appeared on Financial Standard

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Karren Vergara is a financial journalist with Financial Standard, covering wealth management, including superannuation, banking and financial planning. Prior to becoming a journalist, she was an accountant for more 10 years. She has a diploma in journalism and Bachelor's degree in business, both from UTS.